Amplicon, Inc. v. Marshfield Clinic, 91-C-0462-C.
| Decision Date | 03 February 1992 |
| Docket Number | No. 91-C-0462-C.,91-C-0462-C. |
| Citation | 786 F. Supp. 1469 |
| Parties | AMPLICON, INC., Plaintiff, v. MARSHFIELD CLINIC, Defendant and Third-Party Plaintiff, v. BERRY COMPUTER INC. and Deutsche Credit Corp., Third-Party Defendants. |
| Court | U.S. District Court — Western District of Wisconsin |
Anthony R. Varda, Porter DeWitt, Madison, Wis., for Amplicon, Inc.
Roy L. Prange, Jr., Quarles & Brady, Madison, Wis., for Marshfield Clinic.
Frederick A. Bohling, Daly, Bohling & O'Connor, Eagan, Minn., for Berry Computer Inc.
Patricia Gibeault and Axley Brynelson, Madison, Wis., for Deutsche Credit Corp.
Amplicon brought this contract action against Marshfield, alleging that Marshfield is in breach of its lease agreement. Presently before the court is Amplicon's motion for summary judgment. Amplicon contends that the undisputed facts establish as a matter of law that Marshfield owes a deposit and interim rent pursuant to the lease agreement. Amplicon contends further that it is entitled to the title documentation relating to the equipment in the lease or, in the alternative, to such amounts as were deducted by Marshfield and paid to Amplicon's suppliers. Marshfield denies that it is liable for a deposit and interim rent, and contends that it has paid all amounts required to be paid with respect to the lease. Marshfield argues that Berry Computers, acting as the apparent agent of Amplicon, fraudulently induced Marshfield into entering this contract on terms that are inconsistent with those that were represented by Berry to Marshfield.
I conclude that Marshfield is unable to adduce sufficient evidence to show that Berry was acting as the apparent agent of Amplicon or that even if it was, its representations would have fraudulently induced Marshfield to enter into the lease agreement. I conclude also that this lease agreement was unambiguous and that the plain terms of the agreement provided for a deposit and interim rent to be paid by Marshfield. When Marshfield failed to tender payment, it was in breach of the lease agreement.
For the sole purpose of deciding plaintiff's motion for summary judgment, I find the following material facts to be undisputed.
Amplicon is located in Santa Ana, California and specializes in leasing business equipment. Marshfield Clinic is a medical clinic located in Marshfield, Wisconsin. Berry Computer is a computer leasing and remarketing company with its principal place of business in Burnsville, Minnesota. Deutsche Credit Corporation is a commercial lender with its principal place of business in Deerfield, Illinois.
Typically, Amplicon funds its equipment purchases or assigns the lease payments to banks or other financial institutions. Berry specializes in the remarketing of Amdahl computers, a process that involves selling used equipment. Deutsche Credit Corporation is a large commercial lending institution that purchases equipment leases on the secondary market.
In the fall of 1990, Marshfield selected an Amdahl computer system to replace the existing computer system at the Marshfield Clinic. The computer was installed completely by November 19, 1990, with the exception of a compiler. Pursuant to the Amdahl contract with Marshfield, Marshfield had 30 days after installation to evaluate and test the system and, at the end of the 30 days, to render full payment.
Marshfield hoped to obtain tax advantages by leasing the computer equipment. In early December 1990, Ron Pfannerstill, the Financial Director of Marshfield, contacted various equipment leasing companies to request proposals for leasing of the computer equipment installed by Amdahl. An employee of Midland Financial Services, Gerard Ponce de Leon, forwarded Marshfield's request for proposals to Berry, which made an initial proposal for a 60 month term on December 13, 1990. On December 17, 1990, Michael G. Stephens, the Regional Marketing Director for Berry, provided an addendum to the original financing proposal giving the following monthly payment schedule for the following terms:
Terms Monthly Payment
48 months $113,516.51
36 months $141,220.85
On December 20, 1990, Berry faxed to Ron Pfannerstill a copy of the form lease Berry proposed to cover the transaction. Berry had not been involved previously with this form of operating lease and adopted the lease agreement form of Amplicon almost verbatim. The proposed forms included a schedule that had blanks for "initial base term in months," "deposit," and "monthly rent." The Berry form provided specifically that it was first to be signed by Marshfield as an offer, thereafter to be accepted by Berry to form the contract.
During December, 1990, eight companies, including Berry, submitted leasing proposals to Marshfield. Ron Pfannerstill directed his subordinates and Marshfield's attorneys to do various analyses of the proposals. The contract terms and conditions were sent for analysis to the legal department. Reed Hall, in-house General Counsel of Marshfield, assigned the contract analysis to Patti Haney, a staff attorney for Marshfield.
In late December 1990, Amdahl's lawyers contacted Marshfield demanding payment that they believed was due on December 18. Marshfield asserted that the computer system was not complete until it received installation of a portion of the software system and therefore payment was not yet due because the system did not run in its entirety until December 19, 1990. Amdahl agreed to wait until January 18, 1991, for payment.
On January 3, 1991, Haney wrote a ten-page memo to Hall and Pfannerstill with comments on 15 separate sections of the lease that she pointed out as significant or possibly negotiable. The memo contained no reference to interim rent under the Berry lease. One note read:
Marshfield began to focus on the Berry proposal to refine it into a contract.
On January 1, 1991, Gerard Ponce de Leon became an employee of Berry and was assigned to handle the Berry lease with Marshfield. The lease was to be sold to Amplicon in the secondary market.
On January 14, 1991, Ron Pfannerstill reviewed the form lease contracts and made a note to himself that read:
Berry advised Marshfield that Amplicon would be the lessor under the proposal. This was confirmed in writing in a letter dated January 17, 1991. On January 14, 1991, David Brill, Vice President and Regional Manager of Amplicon, began negotiating directly with Haney at Marshfield regarding amendments to the Amplicon form contract. On that same day, Amplicon received the first draft of the Addendum "A" proposed by Marshfield as an amendment to Amplicon's lease form and David Brill spoke directly with Haney by conference call. Employees of Berry (Guy Klingler and Gerard Ponce de Leon) participated in the phone call.
Marshfield proposed a series of amendments: Brill of Amplicon and Haney of Marshfield negotiated most of the amendments, communicating by telephone and fax machine.
On January 16, 1991, Guy Klingler of Amplicon wrote Ponce de Leon requesting that he obtain various documents from Marshfield, including a deposit check of $113,516.53. Ponce de Leon had no idea at that time what the deposit was for and did not learn about it until after he left Berry in March of 1991. On January 16, Christine Berry, Vice President of Berry, advised Haney by letter that Marshfield was required to provide:
Included with the January 16 letter to Haney were a copy of the Amplicon Lease Agreement, order and Lease Schedule number one, Addendum "A" (the negotiated changes from the form contract), Addendum "B" (the casualty law schedule), and Addendum "C" (the fair market value buy out option proposal).
On January 16, Haney negotiated with David Brill various additional changes to the proposed Addendum "A." The Amplicon Lease Schedule forwarded to Haney included a Schedule that showed the following:
_________________________________________________________________________
INITIAL BASE TERM DEPOSIT DEPOSIT TO REDUCE MONTHLY RENT
IN MONTHS LEASED PROPERTY
COST BILLED MONTHLY
48 $113,516.53 $113.516.53
_________________________________________________________________________
Near the close of the day on January 16, Haney turned over the transaction to Reed Hall. That evening, Hall reviewed the various lease documents in preparation for signing them on January 17.
On January 17, Berry provided Marshfield with an unsigned proposed Non-Circumvention Agreement between Berry and Amplicon that was prepared by Christine Berry. It provided in part:
Amplicon refused to sign the agreement proposed by Berry and negotiated a different form of the agreement. Berry and Amplicon each executed in counterpart the final Non-Circumvention...
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